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Market gains for 2018 wiped out by plunging stocks

It's the worst Thanksgiving week for the Dow and the S&P since 2011.
Traders work on the floor at the New York Stock Exchange in New York on Nov. 20, 2018.
Traders work on the floor at the New York Stock Exchange in New York on Nov. 20, 2018.Brendan McDermid / Reuters

The stock market slid dramatically on Tuesday after a slew of disappointing corporate earnings dragged down the Dow Jones Industrial Average and the S&P 500, erasing all gains for 2018. The Dow fell by 648 points at its session low, and closed at 24,465.

It's the worst Thanksgiving week for the Dow and the S&P since 2011, according to Dow Jones data.

Retail earnings released Tuesday hit the market hard, with Target shares falling as much as 15 percent on investor concern that the chain had cut its margins too tightly to remain competitive in the holiday season.

Lowe's also disappointed, reporting lower-than-expected same-store sales, coupled with an announcement that it is closing all stores in Mexico. Shares fell 3.6 percent and rival Home Depot also sank 2 percent.

“Although interest rates have ticked up and housing turnover has been pressured, the home improvement backdrop remains strong,” said Marvin Ellison, Lowe’s chief executive officer, on an earnings call Tuesday.

L Brands, which owns Victoria's Secret and Bath and Body Works, fell 14 percent after it announced a share restructuring. Victoria's Secret CEO Jan Singer resigned last week amid a sales slump and challenging positioning for the lingerie company in the #MeToo landscape.

A tech sector sell-off continued Tuesday, with Apple leading the fray. Tongues wagged and markets moved last week after Lumentum, one of Apple's major suppliers, reported a request to reduce shipments to an unnamed high-volume customer. Although Lumentum did not name Apple, the iPhone maker is listed as its largest customer.

Apple extended losses this week, falling by 4.5 percent on Tuesday and edging towards bear territory as investors feared consumers would not be snapping up the latest iPhones over the all-important holiday season.

FAANG stocks — and investors — had enjoyed a record summer that culminated in Apple and Amazon both becoming trillion-dollar companies. But October was more trick than treat, with Facebook, Amazon and Netflix all slumping in value as concern intensified over the impact on tech firms of the continued tit-for-tat over trade.

The downward slide continued Tuesday, with investor concerns over rising interest rates fanning the flames of extended geopolitical concerns.

CORRECTION (Nov. 20, 2018, 3:55 p.m. ET): An earlier version of this article misstated the name of a company owned by L Brands. It is Bath and Body Works, not Bed and Body Works.